Chinese likely to keep investing in Australian real estate

Chinese investment in Australian real estate is likely to remain strong, according to a Knight Frank report.

By the end of 2015, total Chinese outbound capital was almost US$300 billion – double the amount of 2014, according to Knight Frank’s second ‘China Outbound Real Estate Investment Report: New Waves, New Destinations.’

The devaluation of the RMB and stock market volatility have driven increased demand for alternate asset classes, particularly for investments outside China.

In Australia, China’s investment in real estate has grown rapidly, with the focus on Sydney and Melbourne. The China-Australia Free Trade Agreement, and the Qualified Domestic Individual Investor schemes are expected to further boost Chinese investment in Australian property in 2016.

According to Knight Frank’s Head of Research & Consulting, Australia, Matt Whitby, “Investor interest in Australia, particularly in Sydney, has not diminished as many had feared – even after the latest RMB devaluation and with demand for natural resources weakening.

“Australian prices, coupled with strong Chinese buying power and continued weakness in the Australian dollar, has continued to attract capital inflow,” said Whitby.

Knight Frank’s Head of Asian Markets, Australia, Dominic Ong, said, “In 2015 we saw a significant increase in Chinese outbound investment into Australia, with Sydney and Melbourne attracting a total of US$3.8 billion of Chinese investment.”